Court settlement for former ITT students moves forward

Former students of the bankrupt ITT Technical Institute are one step closer to seeing some compensation. The national for-profit chain of schools closed its more than 130 campuses across 38 states in September 2016 and has been accused of defrauding students. (AP Photo/Rich Pedroncelli)

Editor’s Note: This story has been updated to correct information about students giving their approval of the settlement.

Former students of the bankrupt ITT Technical Institute are one step closer to seeing some compensation.

A judge gave preliminary approval Wednesday for former students of the collapsed chain of for-profit schools to receive a $1.5 billion settlement in bankruptcy court, according to the Harvard Law School Project on Predatory Student Lending, which has been representing a class of students in the case.

The ex-ITT students who stand to benefit from the settlement include more than 150 veterans who attended the school between 2006 and 2016, said representatives for Veterans Education Success, a nonprofit that provides legal and counseling services to veterans and family members who have been defrauded by schools. Carrie Wofford, the organization’s president, said in an email that there are likely more veterans included in the student group who filed claims on their own or through other means.

“ITT Tech defrauded thousands of military veterans out millions of dollars in educational benefits,” Wofford said in a news release. “VES worked with whistleblowers inside ITT Tech to expose predatory fraud targeting veterans, and led more than 200 volunteer attorneys in assisting ITT Tech veterans in filing claims with the bankruptcy court and other relief.”

ITT Tech closed its campuses nationwide in September 2016, bringing an abrupt end to ongoing degree programs for 40,000 students, including 7,000 GI Bill users. In many cases, students were left with scores of student loans and credits that wouldn’t transfer to other institutions.

When it closed, the school was being investigated for fraud, and the federal Education Department had barred it from enrolling new students on federal student aid dollars.

A spokeswoman for the Project on Predatory Student Lending said in an email ITT Tech “specifically targeted veterans and military members and received hundreds of millions of dollars in revenue from veterans and military benefits.”

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